Good morning. I am very pleased to join everyone for this Agricultural Advisory Committee (AAC) meeting. I thank Chair Behnam and Swati Shah, Designated Federal Officer for the AAC, as well as Scott Herndon, President, Field to Market: The Alliance for Sustainable Agriculture, for their efforts to organize today’s meeting. I look forward to hearing and learning about liquidity, interest margin, access to credit through farm lending, interest rate risk, and land values in farming communities as well as options growth in the farming community.

Two of the issues that may impact small and medium-sized farming enterprises are part of today’s agenda. I am looking forward to hearing from Ty Kreitman of the Federal Reserve Bank of Kansas City, Joe Koenigsman of the FDIC, and Scott Donnelly of the Farm Credit Administration who will examine access to farm lending. I also look forward to hearing from Derek Samman of CME regarding options growth in agricultural markets.

Both topics seek to enable farmers and ranchers and other end users to have the resources that they need to manage and mitigate risks particularly during periods of sustained pricing volatility. These market challenges are sometimes exacerbated by frequent severe weather conditions and exogenous factors such as geopolitical events.

For example, in previous Ag Advisory Committee meetings and in my meetings with milling companies in Michigan and ranchers in Texas, we have discussed the challenges presented by too much or too little rain. Drought presents a global challenge for irrigation but also creates greater costs for logistical operations such as shipping and distribution. At an Ag Advisory Committee meeting last year, a representative from the Army Corps of Engineers described the impact of low water levels on the Mississippi River. Today, we are witnessing similar low water levels in the Panama Canal. Alongside these issues, markets have navigated the price volatility of energy inputs and grain outputs in connection with Russia’s invasion of Ukraine. Conflicts in the Middle East further reduce shipping lanes, and just a little over a week ago, a barge that lost power collided with the Francis Scott Key Bridge, creating additional pressures on shipping logistics.

As we explore the issues in the agenda today, I am thoughtful about solutions that may aid farmers and ranchers in increasing yields and thus profits with the same amount of inputs or achieve an equivalent yield with fewer inputs. One such example is precision agriculture, a transformative approach that integrates technology and data analytics to optimize farming practices and enhance agricultural productivity.[1] It represents a pivotal advancement in enhancing farming efficiency, sustainability, and resilience.[2] Precision agriculture uses a wide range of technologies, from remote sensing platforms to in-ground sensors, to gather data about soil conditions, weather patterns, crop health, and other relevant factors.[3]

Precision agriculture empowers farmers to make data-driven decisions that optimize resource allocation and enhance crop yields. Moreover, it may increase the efficiency of chemical and fertilizer use, helping farmers to avoid excess application and improve the environmental sustainability.[4]

Federal agencies have expressed support for precision agriculture’s adoption and development. In particular, the U.S. Department of Agriculture has provided financial assistance and loans and has established partnerships with the National Science Foundation to support such practices, including through the development of artificial intelligence research institutes.[5]

Amidst the backdrop of dynamic technological advancements, we must navigate these changes thoughtfully and proactively. While precision agriculture may provide substantial benefits, there are challenges related to the use of precision agriculture, such as high up-front acquisition costs, lack of uniform standards, and concerns regarding farm data sharing.[6]

I recently had the privilege of traveling to Zambia and South Africa, where I delivered keynote remarks at an event on emerging technologies hosted by the South African Reserve Bank. Zambia is currently facing a severe drought that has devastated the agricultural sector.[7]  This crisis poses a significant threat to national food security as well as water and energy supply.[8] Technological advances like precision agriculture may mitigate similar challenges in the future—but only if they are accessible and affordable.

As the proliferation of precision agriculture technologies generates vast amounts of agricultural data, it is also important to ensure that farmers maintain control over their data and to safeguard against unauthorized access to or misuse of data. Large agriculture machine companies aggregate significant quantities of data in order to improve the accuracy of predictions.[9] In the face of such advances, we cannot lose sight of concerns around data privacy—for example, concerns of farm owners that their data could be sold to competitors or commodity traders.[10] Data privacy is a critical issue that I have devoted significant attention to. As I have previously noted in discussing the Commission’s efforts to understand the uses of artificial intelligence, we must safeguard data privacy by ensuring that data “is stored securely and used only for its intended purpose.”[11]

As we explore the potential of precision agriculture to revolutionize farming practices, we must remain mindful of its broader implications for food security, environmental sustainability, and global economic development. I look forward to our discussions and the insights that will emerge as we delve into this critical topic at the intersection of agriculture and innovation.

Thank you.